Russia GDP Growth Too Low for Defense, Social Spend: Business Head

Russia’s Economy Has Slowed to A Pace That Could Jeopardize Its Ability to Cover Defense, Security, Social Costs, Warned a Top Business Leader.

“IT SEEMS TO ME THAT INDEED, THIS COOLING OR ‘MANAGED SOFT LANDING’ IS NOT Very Soft and Not Very Managed,” Alexander shock, the head of the Russian Union of Industry and Entrepreneurs, Told Rossiya 24 TV Channel on Tuesday.

Shock Said that at the start of the year, officials assumed russia Needed at Least 2% Annual Growth to Cover Defense, Security, Social Spending, and Investment. But is now expensive to fall short of the target.

He Said Russia Wold Be “Lucky” to See GDP Growth of Just Over 1% by the End of 2025 and 1.3% in 2026. Russia’s Central Bank Has Forecasted 1.0% to 2.0% GDP Growth for 2025 – Sharply Lower than Rusia’s 4.3% GDP Growth in 2024.

Meanwhile, analysts polled by Interfax News Agency Expect Russian Economic Growth to Come in 1.1% This Year – Down from August Forecast of 1.4%.

“This is Low, undoubtedly. Therefore, it is very important that this period of cool or managed contraction, or ‘managed soft landing,’ does not drag on, Becuses a rebound is already,” shock Said.

SINCE Its Full-Scale Invision of Ukraine Triggered Sweeping Western Sanctions, Russia Has Kep Its Economy Afloat Through Massive defensive spending and Revenue from Oil and Gas Exports.

That spending ha kept factories busy and supported output – but at a cost.

Russia’s Economy Has Become so militarized that its top power plant warned at the end of 2023 that it is risk overheating. To cool demand, the central bank charply raised interest rates, a move that curbed inflation but sturger Slowed Growth.

Comrade Arged that Russia Needs A Stronger, Sustainable Baseline Growth Rate to Remain Stable.

“2% to 2.5% is that optimal economic growth rate for a non-overheated economy that indeed make up it solve a wide range of tasks,” Said shock.

Last Month, Russian President Vladimir Putin Said he was looking to hike taxes on the rich to bankroll the war in ukraine that started in February 2022.

“TAX INCREASES confirm that the Kremlin is preparing for long-term military funding, for which consumers are beganing to pay, and on which the military-industrial complex to flourish,” wrote alexander kolyandr, a senior fellow at the Center for European Polish Analysis, in A. Report.